MENA region capitalises on one of its greatest assets

The last 12 months may have been the busiest ever for solar PV in the Middle East and North Africa (MENA). We take a closer look at how much has been accomplished and what it all signals for 2015.

New feed-in-tariffs in Egypt, manufacturing plans in the UAE, Saudi Arabia and Qatar, and government project tenders in Jordan have finally set the wheels in motion for solar PV in the region. Even countries including Bahrain and Lebanon, previously quiet on the solar front, have stepped up to capitalise on the power of this infinite resource.

GCC technology transfer.

As previously reportedon PV Insider, Saudi Arabia’s latest plans for PV entail building a capacity of 6 GW over the next 10 years. In preparation for this transition, earlier this year, Taqnia invited proposals for the EPC of 6 MW of CPV projects, acquired American CPV manufacturer Solar Junction, and bought 50% of EPC contractor Sun & Life.

A similar move was made more recently by Saudi Arabia’s Idea International, when it signed an agreement with REC Silicon, a Washington-headquartered polysilicon manufacturer. This paved the way for discussions on a potential joint venture (JV) in which REC would hold a 25% equity stake, Idea 25%, and the Saudi government 50%. As an investment and development company, Idea itself is building a polysilicon manufacturing plant that will start supplying the industry by mid-2016.

Such acquisitions indicate a selective technology transfer phase meant to develop national manufacturing capabilities and supply upcoming projects, such as the five solar power stations that K.A.CARE will be building in 2015, and the solar-rooftop project that the government entity is coordinating across the kingdom’s schools.

Qatar is also pursuing aggressive plans to produce polysilicon. Having acquired 70% in Qatar Solar Technologies (QSTec) and 29% in Germany’s SolarWorld, last August Qatar Solar Energy (QSE) signed a 10-year polysilicon supply deal with Kazakhstan’s industrial company Kazatomprom.

“The steady supply of quality raw material is crucial to QSE’s mission. Solar grade silicon from Kazatomprom will be used in the manufacture of QSE's innovative products,” explains Abbassi.

Moreover, the partnership should better enable QSTec to supply local projects, such as Qatar’s first solar power plant – a 15 MW project to be built in northern Doha by 2016.

As for Kuwait, interest in solar power has manifested into a plan to install a series of rooftop PV systems, including 2-3 MW on 150 homes by 2016, and 1 MW on two Cooperative Society supermarkets by 2015.

The largest PV projects in the country, however, are the Shagaya 10 MW PV plant, which TSK Electronica & Kharafi National are said to have been awarded according to industry insiders, and the 10 MW PV plant awardedto Italy’s Gestamp Asetym by Kuwait Oil Company (KOC); a five-year build-operate-transfer project valued at US$28m.

KOC’s project is a milestone for the regional oil and gas industry, implying growing confidence in the use of solar energy to assist with various stages of fossil fuel production. As Shagaya, KISR has yet to reveal the timelines for construction and operation of the power plant.

UAE gets private-sector boost

Meanwhile, private-sector installations have revived the UAE’s solar market. Omega, for example, a local PV manufacturer, is currently providing panels to a labour camp in Ajman, whileMICC GreenTec has installed off-grid systems at multiple locations, including a desert safari camp and a massive outdoor signboard.

“Our company has the largest rooftop installed base in the UAE’s private sector, and all of our customers are off-grid, mainly using diesel,” says MICC CEO Waseem Qureshi.

Enviromena, on the other hand, has installed the biggest number of grid-connected PV plants in the region and has now expanded to Dubai. “A lot of solar activity is out of Dubai and international developers have situated themselves here, so we found it makes sense, in addition to our headquarters in Abu Dhabi and office in Jordan,” cofounder Sami Khoreibi tells PV Insider.

With the increasing demand and with the procedure for obtaining solar-power generation licenses simplified, it doesn’t come as a surprise that Chinese solar panel manufacturer Chang Zhou Almaden is setting up a factory in Dubai to produce up to 400,000 PV panels every year.

“We believe Almaden will create an impact on the market,” said Jinxi Lin, Chairman of Chang Zhou Almaden. “Our ultra-thin dual glass PV panel has been especially designed for the hot summers of the Middle East.”

When it comes to utility-scale projects, only one is currently moving forward in the UAE, which is also the largest in the region – the 100 MW PV power plant in the second phase of the Mohammed bin Rashid Al Maktoum Solar Park. From 24 shortlisted bidders that were narrowed down to 10, Saudi Arabia’s ACWA Power was recently identified as the lowest bidderon this project, proposing an unprecedented tariff of $5.98 cents/kWh.

Smaller Gulf nations also aspire to harness solar. In Bahrain, Masdar is conducting feasibility studies on two sites – Hawar Islands and Al-Dour – for solar and wind power plants, and in Oman, the country’s Rural Areas Electricity Company plans to invest OMR3m ($7.8m) in solar projects, according to a report by Times of Oman.

Levant’s dire need for solar

In the Levant region, Jordan still leads the way, thanks to a combination of government tenders, competitive FiTs, local content incentives and international financing. At the same time, soaring electricity prices are pushing companies, hospitals, and universities toward self-regulation PV projects.

“Jordan has been fortunate in being the first mover in solar PV IPPs in the region. As a result, it's attracting a lot of attention today and an experience base is being built by local players at different parts of the value chain,” says Ennis Rimawi, founder of Catalyst Private Equity, a MENA-focused energy and water private equity fund.

Elsewhere in this region, limited activity is taking place in Lebanon, a market penetrated by Germany’s Care-Energy last summer to supply with solar power products.

And in Gazza, Palestine, the Ministry of Higher Education embarked on an ambitious project to use PV to power schools. According to Ismail Kurdiya, who is overseeing solar projects at the Ministry, five schools have been connected with PV systems, and 14 additional schools will be provided with around 297-300kW of PV with the support of Qatar Charity.

“There's a long-term vision to implement such schemes for the rest of the schools in Gazza and the ministry is constantly seeking financiers,” says Kurdiya.

North Africa lures investors

Egypt and Morocco remain the most progressive renewable energy markets in North Africa. Along with the government tenders in Egypt, a ministerial decree obliging all government buildings to increase their energy efficiency has led to an influx of solar projects across the country’s provinces.

“You will hear about new projects almost every day,” says Ahmed Moukhtar, cofounder of Rodosol, a Cairo-based renewable energy developer that submitted proposals to build two solar rooftop projects.

Indeed, various governorates throughout the country are weighing the options for PV plants, including Luxor, Qalyubiya and Siwa, the latter where Enviromena and Masdar will be building a $20 million, 10 MW solar plant to be financed by the UAE.

In Morocco, PV may finally be able to catch up with concentrated solar power with the help of the Solar Breeder, a €22m investment project bringing together 22 Italian companies to participate in the local PV market. Led by Rome-based Kenergia and backed by MASEN, the JV was launched in November and is in discussions with banks and investors.

As fragmented as developments in the MENA may seem, there’s no doubt that progress is being made. Ultimately, advanced solar markets such as Jordan and the UAE could start supporting newer entrants like Saudi Arabia and Egypt, presenting an even wider opportunity landscape for local and foreign players.